What's next? Senate GOP scrambles after health care flop

Senate Republicans are scrambling to pick up the pieces after their attempt to repeal and replace the Obama-era health care law collapsed a second time.

After working for months on a new health package, Senate Majority Leader Mitch McConnell, R-Ky., announced Tuesday that the Senate would vote to move ahead on a straight-up repeal early next week, at the request of President Donald Trump, Vice President Mike Pence and other Republicans.

But even that effort is failing. At least three GOP senators came out against that plan, which would deny McConnell the votes needed to even debate a bill.

McConnell noted that a Republican-led Congress voted to repeal the law in 2015. But President Barack Obama was in the White House at the time, so Republicans knew he would he would veto the measure.

This time, with Republican President Donald Trump in the White House, the vote would count.

"If you voted in 2015 for it and now you're going to vote against it, you've got some explaining to do," said Sen. Rand Paul, R-Ky.

A look at what could come next:

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ONE MORE TIME

If Senate Republicans can't round up the votes to repeal the health care law, they have several options. They can keep talking among themselves in an attempt to come up with another Republican-only plan.

This strategy has been unsuccessful so far because, with 52 members, Senate Republicans can only afford to lose two votes.

Conservatives and moderates in the House managed to bridge their differences and narrowly pass a bill. Since then, the president has called the House measure "mean" and Senate Republicans have been unable to rally around a replacement.

Senators like Rob Portman of Ohio and Shelley Moore Capito of West Virginia are concerned that too many low-income people in their states would lose coverage, especially as those states fight an opioid epidemic.

Senate Republicans can work with Democrats on ways to improve the program, but this would be a difficult marriage to arrange.

Republicans say they are committed to repealing Obama's health care law, which is a nonstarter for Democrats. Democrats say they are open to improving the program, but that would fall well-short of Republican campaign promises.

"Rather than repeating the same failed partisan process yet again, Republicans should work with Democrats on a bill that lowers premiums, provides long-term stability to the markets and improves our health care system," Senate Democratic leader Chuck Schumer of New York said.

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CUT AND RUN TO TAX REFORM

Congressional Republicans could drop health care and move on to overhauling the nation's tax code, but they will probably run into many of the same problems.

Trump seemed to push this approach Tuesday.

"I think we're probably in that position where we'll just let Obamacare fail," the president said. "We're not going to own it. I'm not going to own it. I can tell you that the Republicans are not going to own it."

Trump said letting the program fail will encourage Democrats to come to the table and negotiate.

Republicans might find that they could use help from Democrats in tackling a tax overhaul as well.

So far, Republicans are excluding Democrats from tax talks, just like they have on health care. But Republicans' slim majority in the Senate isn't going to get any bigger before the 2018 midterm elections, and it could get smaller after that.

Taxes are likely to cause just as many divisions among Republicans as health care, both ideological differences and regional ones.

For example, House Republicans and Trump have proposed eliminating the federal deduction for state and local taxes to help pay for lower overall income tax rates for everyone. Eliminating the deduction would raise about $1.3 trillion over the next decade, which could pay for a lot of other tax cuts.

But the deduction is very important to high-tax states such as New York, New Jersey, California and Connecticut. All of these states are traditional Democratic strongholds, but some send quite a few Republicans to Congress — votes that GOP leaders will need to overhaul taxes.

Rep. Leonard Lance, a five-term Republican from New Jersey, is leading the effort to keep the deduction. He said the White House "knows my position on this issue."